Monday Business Edition

This is the first installment of what I hope is going to be a regular Monday feature.

I always find it instructive to keep track of the money since I think it explains a lot about politics.

There are 2 major interrelated economic stories moving in the background.  One is the question of stimulus and the recovery of the ‘Main Street’ economy and the other is the question of deficit reduction and austerity particularly related to Social Security.

What relates these 2 stories is the abandonment by modern economists of Keynesianism.  If you haven’t already, you should really read Krugman’s How Did Economists Get It So Wrong? from September of 2009 where he describes the irrational theories of the two main trends of academic economics, the salt and freshwater schools.

To me ignoring the proven facts of Keynesian Economics makes about as much sense as a biologist rejecting the ‘Theory’ of Evolution and Genetics.  I suppose it’s possible to do good and rigorously academically grounded work but you’re really rejecting everything that makes your ‘science’ umm… ‘scientific’, which is to say predictive of measurable future results.

Just because your second derivative (in the calculus sense) quant guy can give you a value for the change in the slope of a curve doesn’t make it anything but mathematical masturbation unless your model bears some relation to reality.

Anyway, below you will find some stories I’ve collected from the Business section of Yahoo News.  Just because some of these guys are rich doesn’t mean any of them are smart.

Monday Business Edition is an Open Thread

From Yahoo News Business

1 India rocked by strike over fuel prices

by Giles Hewitt, AFP

1 hr 14 mins ago

NEW DELHI (AFP) – An opposition-led strike over fuel price rises disrupted life across India on Monday, triggering transport mayhem and sporadic violence in major cities where schools and businesses closed down.

Flights were grounded in commercial airline hubs such as Mumbai and Kolkata, while protesters attacked buses, blocked roads with burning tyres and organised sit-down protests on inter-city railway links.

Police were out in force to prevent any large-scale unrest during the day-long strike called by the main opposition Bharatiya Janata Party (BJP) and leftist parties in a show of strength against the Congress-led government’s reform programme.

2 Shanghai composite index hits 15-month low

by Nick Coleman, AFP

1 hr 49 mins ago

HONG KONG (AFP) – Asia-Pacific stock markets were mixed on Monday with caution prevailing during the US holiday against a background of continued global economic worries, while Shanghai hit a 15-month low.

Japanese shares edged 0.69 percent higher on bargain hunting but many investors stayed on the sidelines as US markets were closed for the Independence Day holiday.

The headline Nikkei index, which hit a seven-month low on Thursday, gained 63.07 points to close at 9,266.78. The Topix index of first-section shares added 0.71 percent.

3 Newspapers look for ways to profit in Internet age

by Michelle Fitzpatrick, AFP

Sat Jul 3, 7:36 am ET

LONDON (AFP) – Newspapers worldwide are being forced to reinvent themselves for the Internet age — and will be watching closely the success of two experiments launched in London, analysts say.

Suffering a long-term fall in sales and a collapse in advertising revenue as the world goes online for its news, the press has for years been scrambling to decide how to respond.

In Britain, Rupert Murdoch’s Times and Sunday Times finally went ahead from Friday with their long-promised plan to start charging readers for online access to their journalism, the first non-specialist papers to do so here.

4 German car sales plunge in June, exports climb

by Aurelia End, AFP

Fri Jul 2, 8:52 am ET

BERLIN (AFP) – German car sales plunged last month, reflecting an end to a cash-for-clunkers bonus, but robust foreign demand for Germany’s famed luxury models sparked a spurt in exports.

Matthias Wissman, head of the VDA auto association, said the federation foresaw a “normalisation” in the auto industry this year in the aftermath of car-scrapping premiums in many parts of the world.

He also pointed to solid performance expected on Asian markets.

5 Global stocks down for 4th day

By Dominic Lau, Reuters

2 hrs 33 mins ago

LONDON (Reuters) – World stock prices fell for the fourth day running on Monday and the dollar traded close to two-month lows on growing concerns of slowdowns in the United States and China — the two main pillars of global growth.

Trading was expected to be light on Monday because of the U.S. Independence Day holiday.

Data showing the U.S. labor market shrank for the first time this year in June, slower Chinese manufacturing activity and euro zone austerity measures fueled concerns over prospects for the global economy.

6 Bulls on the run in shortened week

By Ryan Vlastelica and Angela Moon Ryan, Reuters

Sun Jul 4, 11:19 am ET

NEW YORK (Reuters) – Bearish bets in the equity options market, coupled with an increasingly sour view from a technical perspective, suggest stocks will struggle to break from a vicious two-month downtrend this week.

With few catalysts on tap, it could be difficult for investors to find a reason to buy even as recent declines and a jobs report that did not confirm investors’ worst fears present the opportunity for a short-term boost.

U.S. markets will be closed on Monday for Independence Day, and the holiday is expected to depress volume during the week, making equities more vulnerable to large swings following the worst week for the S&P 500 in two months.

7 BP eyes stake sale as spill cost tops $3 billion

By Raji Menon and Eman Goma, Reuters

2 hrs 23 mins ago

LONDON/KUWAIT (Reuters) – Shareholders in British oil company BP balked at reports it would seek urgent investment from a wealthy Middle East or Asian country as clean-up costs for its U.S. oil spill topped $3 billion.

Over the weekend, while U.S. Independence Day holidaymakers shunned Gulf of Mexico beaches tarred by the leaking well, media reports said BP was looking for a strategic investor among the sovereign wealth funds of the Middle East and Asia.

An investor would help ward off a takeover and raise funds for the liabilities racking up behind the worst oil spill in U.S. history, the reports said.

8 Emerging market M&A gains share on West

By Michael Flaherty and Denny Thomas, Reuters

59 mins ago

SINGAPORE (Reuters) – A burst of corporate acquisition activity in Asia shows that executives throughout the region are gaining confidence in their financial outlook and expansion strategy, with cross-border deals on the upswing.

Asia Pacific M&A, excluding Japan, rose 78 percent last quarter, according to Thomson Reuters, with emerging market acquisitions now one-third of total deal volume.

While the largest transactions still mainly originate in the United States and Europe, a slew of recent deals have come from places like China, the Middle East, and Southeast Asia.

9 Loan growth seen as key test for Gulf banks’ revival

By Rachna Uppal, Reuters

29 mins ago

DUBAI (Reuters) – Investors are looking for signs of renewed lending growth from upcoming Gulf Arab bank results, where provisions for bad and doubtful debt will continue to weigh on second quarter profits.

“NPLs will probably dominate the headline but we think attention should be put on loan book growth,” said Daniel Broby, chief investment officer at Silk Invest fund.

“Outside of Dubai, we are expecting signs of loan growth right across the rest of region.”

10 Bank of China: New funding to suffice for 3 years

By Doug Young, Reuters

Mon Jul 5, 5:15 am ET

HONG KONG (Reuters) – Bank of China (3988.HK) (601988.SS) said its bid to raise up to $8.9 billion should give it enough capital for the next three years, seeking to assure markets its second major fund-raising this year will mend its stretched balance sheet for the foreseeable future.

Bank of China’s move caught many off guard in part because it comes just as Agricultural Bank of China (ABC.UL), the nation’s No.3 lender, is preparing to launch an IPO in Shanghai and Hong Kong, expected to raise $20 billion or more later this week.

Most of China’s top banks have announced plans to tap capital markets — aiming to raise more than $70 billion combined — to replenish their capital levels that were depleted after the record, government-directed lending of last year and to meet tighter capital adequacy ratios demanded by regulators.

11 World Cup fever fuels German growth hopes

By Erik Kirschbaum, Reuters

1 hr 18 mins ago

BERLIN (Reuters) – Germany’s strong run in the World Cup may be the catalyst for a growth spurt by Europe’s largest economy, as consumers riding the “feelgood factor” of national success dip in to their savings and start spending again.

Worries over the Greek debt crisis, financial market turbulence, government cutbacks and turmoil in Chancellor Angela Merkel’s center-right coalition have combined to keep a lid on domestic demand, capping official growth forecasts for 2010 at a modest 1.4 percent of GDP.

Analysts already believe that figure is too low, and some now see a further boost of between one and three tenths of a percentage point from Germany’s progress to Wednesday’s semi final, coinciding as it does with a labor market upturn and low inflation.

12 Central bankers shoulder bigger burden

By Emily Kaiser, Reuters

Sun Jul 4, 3:01 pm ET

WASHINGTON (Reuters) – Central banks may be the only remaining line of defense against a scary-but-remote double-dip recession threat.

The European Central Bank and the Bank of England both hold policy-setting meetings on Thursday that are likely to yield no changes in already record-low interest rates.

“I suspect (ECB President Jean-Claude) Trichet would like next week’s meeting to be one of the more unexciting meetings,” David Scammell, head of UK and European interest rate strategies at Schroders, said on Reuters Insider.

13 Chinese court sentences US geologist to 8 years

By CHARLES HUTZLER, Associated Press Writer

1 hr 16 mins ago

BEIJING – An American geologist held and tortured by China’s state security agents was sentenced to eight years in prison Monday for gathering data on the Chinese oil industry in a case that highlights the government’s use of vague secrets laws to restrict business information.

In pronouncing Xue Feng guilty of spying and collecting state secrets, the Beijing No. 1 Intermediate People’s Court said his actions “endangered our country’s national security.”

Its verdict said Xue received documents on geological conditions of onshore oil wells and a data base that gave the coordinates of more than 30,000 oil and gas wells belonging to China National Petroleum Corporation and listed subsidiary PetroChina Ltd. That information, it said, was sold to IHS Energy, the U.S. consultancy Xue worked for and now known as IHS Inc.

14 World stocks steady amid worries over US recovery

By CARLO PIOVANO, Associated Press Writer

1 hr 37 mins ago

LONDON – World stocks were steady Monday amid worries that the economic recovery in the U.S. will slow down, with trading light as Wall Street was due to remain closed for the Independence Day long weekend.

A disappointing jobs report from the U.S. on Friday suggested the world’s largest economy is stuttering, while other figures indicate China – which booked good growth during the recent years of financial and economic turmoil – could also slow down.

European markets found some support in a report showing retail sales in the region rose modestly in May.

15 NY Rep. Rangel stumbles after reaching top

By LARRY MARGASAK, Associated Press Writer

1 hr 5 mins ago

WASHINGTON – Just about everyone likes Charlie Rangel.

Republicans pump his hand, Democrats put their arms around his shoulders and women of all political persuasions give him pecks on the cheek.

Spend some time with the 80-year-old congressman from New York City who’s been striding the Capitol’s halls for four decades on behalf of residents of Harlem, and there’s little evidence he’s become someone to avoid because of an ethics cloud that’s more likely than not going to darken in days to come.

16 Farmers find opportunity in immigrant vegetables

By STEPHEN SINGER, Associated Press Writer

Mon Jul 5, 3:29 am ET

SOUTH DEERFIELD, Mass. – Maxixe, a Brazilian relative of the cucumber, is relatively unknown in the U.S., but it may one day be as common as cilantro as farmers and consumers embrace more so-called ethnic vegetables.

Agriculture experts at the University of Massachusetts at Amherst and elsewhere are teaching farmers to grow non-native vegetables that appeal to a growing market of African, Asian and Latin American immigrants. These immigrants and their children already account for more than one-third of produce sales in supermarkets, said Frank Mangan, a plant and soil sciences professor at UMass. And as other customers become more familiar with ethnic foods, experts expect sales to grow even more.

The number of Massachusetts farmers markets that carry ethnic vegetables jumped by 25 percent in a year, to 202 last year, said Scott Soares, commissioner of the state’s Department of Agricultural Resources.

17 Tech firms aim to keep wayward walkers on path

By BROOKE DONALD, Associated Press Writer

2 hrs 57 mins ago

PALO ALTO, Calif. – Todd Atwood says he doesn’t worry too much about accidents when walking down the street using his iPhone to make calls, send text messages or check his e-mail.

But he’s seen the consequences of paying more attention to the gadget than what’s ahead.

“I saw someone walk right into a sign,” recalled the 32-year-old Silicon Valley resident. “She didn’t hurt herself but she was startled. She dropped her phone, then her friends starting laughing at her. It was funny but I guess it could’ve been more serious.”

18 After drop, will stocks rise? S&P data offer hope

By BERNARD CONDON, AP Business Writer

Sun Jul 4, 1:30 pm ET

NEW YORK – OK, you’re gutsy enough to buy on dips. Now how about buying on a dive?

After a scary slump for stocks this spring, that’s the question facing many investors. In the three months ended June 30, the Standard & Poor’s 500 index fell 11.9 percent, the biggest quarterly loss since the financial crisis. The fear is that economic growth may slow, or stall, and that’s got even bulls wondering if stocks could drop even lower.

The good news: If you can muster the courage to buy, history suggests you may be rewarded.

19 Mideast buyers reported to be eyeing BP investment

By ADAM SCHRECK, AP Business Writer

Sun Jul 4, 3:04 pm ET

DUBAI, United Arab Emirates – BP may be looking to sovereign wealth funds in the oil-rich Middle East to fend off takeover bids amid mounting costs from the Gulf of Mexico oil leak disaster, according to reports published Sunday.

The National, an Emirati newspaper, cited unnamed “informed sources” in the region saying that Mideast financial institutions have submitted proposals to BP advisers and are waiting for a response. Among the options being considered are the acquisition of key assets or a direct cash injection to help strengthen the oil giant’s balance sheet, according to the English-language paper.

The paper quoted a person it called an informed source as saying that “BP knows there is potential support from the Middle East.”

2 comments

    • on 07/05/2010 at 16:25
      Author
    • on 07/05/2010 at 19:43

    on rumors of Middle East Investors’ interest

    Shares in BP have risen amid speculation that Middle East investors may buy stakes in the oil giant.

    The shares closed up 3% at 333.3p following media reports suggesting that BP is seeking investment from Middle Eastern sovereign wealth funds.

    BP refused to comment directly on the speculation, but said it “welcomed new investors”.

     

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